ASX gains as miners defy iron ore drop

Australia’s biggest miners were stronger on the ASX on Wednesday, despite the spot price of iron ore, delivered in China, slipping to a 25-month low of $US88.90 a tonne.
Photo: James Davies

by
Sally Rose

Australian shares closed a volatile ­session stronger as official data showed construction activity fell for the third quarter in a row, company results season delivered mixed results, and a swag of big names dipped after trading ex-dividend.

The benchmark S&P/ASX 200 Index added 0.2 per cent on Wednesday to 5651.2 points, while the broader All Ordinaries Index rose 0.3 per cent to 5648.9 points. Local shares took a strong lead from Wall Street after the S&P 500 closed above 2000 points for the first time in its history on Tuesday.

As the European Central Bank mulls further easing, global markets are riding a wave of optimism led by the US.

“Despite the strong recovery of the past few years leading up to the S&P 500 reaching the key 2000 landmark, I remain bullish on the outlook and feel the strength and duration of the resurgence will surprise many," Fidelity Worldwide Investment chief investment officer Dominic Rossi said.

AFR
AFR

In domestic economic news on Wednesday, Australian Bureau of Statistics data showed that total construction work carried out in the June quarter slipped 1.2 per cent. The result was slightly weaker than forecast.

“While the construction data was worse than expected, it remains within the range printed since the peak of the mining construction boom in 2012-13. Investment isn’t falling off a cliff," Citigroup equity strategist Paul Brennan said.

Construction and property group Lend Lease gained 1.5 per cent to $13.95 after reporting a 50 per cent jump in full-year profit after selling its stake in a British shopping centre.

Building materials supplier Boral jumped 4.5 per cent to $5.63 after showing a bigger than expected profit as it swung back from a loss.

The index was buoyed by gains among the big four banks. Commonwealth Bank of Australia added 0.5 per cent to $81.12, while Westpac Banking Corporation rose 0.6 per cent to $35.12. ANZ Banking Group gained 0.7 per cent to $33.54, and National Australia Bank lifted 0.7 per cent to $34.80. In retail Woolworths gained 0.5 per cent to $36.96, while Wesfarmers, owner of Coles, added 0.4 per cent to $44.76.

Insurance broker and underwriter Steadfast Group was the best-performing stock in the ASX 200, climbing 14.8 per cent to $1.59. Steadfast showed full-year results that topped forecasts and confirmed it has made a $55 million bid for smaller rival Calliden.

Ragtrader Pacific Brands, owner of Bonds and Berlei was the worst-performing stock in the ASX 200, dropping 9.5 per cent to 52.5¢, as analysts mulled the sale of its workwear division to Wesfarmers and a strategy to divest more non -core brands announced this week.